Murray v. Ayer

This is assumpsit against the defendant as maker of a promissory note for $400, dated September 30, A.D. 1882, payable to the order of Parsons, Murray Co., ninety days after date. The firm of Parsons, Murray Co. consisted of Henry L. Parsons, James T. Murray, and Albert S. Allen, general partners, and Roscoe S. Washburn, special partner. It expired by its own limitation December 31, A.D. 1883. A new firm was then formed, under the name of Murray Allen, consisting of said Murray and Allen as general partners, and said Washburn as special partner. It was formed for a year, but continued in existence by renewal from year to year until A.D. 1888, when this suit was brought. It bought the assets of the old firm, including the note in suit, and was authorized by the old firm to settle its affairs. The note passed to the new firm unindorsed, and remained unindorsed until shortly before this suit was begun, when it was indorsed in the name of the old firm by said Murray. Parsons had previously died. This action was brought in the Court of Common Pleas by Murray Allen, the plaintiffs, as indorsees. Jury trial was waived, and the case tried to the court. On trial, the foregoing facts having appeared in evidence, the defendant asked the court to rule that the plaintiffs could not maintain their action, on the ground that the indorsement was unauthorized, said Murray having no authority to indorse the note in the name of the old firm after its dissolution. The court refused, and gave judgment for the plaintiffs. The defendant excepted. The question is, did the court err.

The general rule is, that one partner has no authority as such to bind his copartners to any new liability after dissolution, his agency as such being incident to the partnership and ceasing with it. The partners, however, can, if they choose, continue or renew the agency, and may be bound, if they do. So they may ratify an act done by one partner for the partnership in its name, and give it effect, as if previously authorized. InYale v. Eames, 1 Metc. 486, it was held that authority given to one partner by the others, after dissolution, to sell a negotiable note made payable to the firm before dissolution, carried with it by implication authority to indorse it "without recourse" in the firm name. In Waite v. Foster, 33 Me. 424, a firm of two partners dissolving, one sold to the other his interest in a negotiable note, and it was held that the latter had by implication the right to indorse it "without recourse" in the firm name, and dispose of it. 2 Bates on Partnership, §§ 690, 698. In the case at bar the words "without recourse" were not prefixed, but the note was indorsed by one of several surviving partners, and the others, by bringing suit on it under the indorsement as indorsees, necessarily adopted or ratified it. It seems to us that the indorsement must be held to be effectual.

Exception overruled.